zirchlg good thursday morning. it's 8:00 a.m. at amazon headquarters in seattle, washington. it's 11:00 a.m. on wall street, and squawk alley is live. ♪ good thursday morning. john fort is live at the max. first on cnbc interview with the ceo of atlassian, which is expected to start trading in the next few minutes. back at post nine for the hour, sarah eisen joins us.

working overtime. good to have you. henry, business insider founder and ceo on a very interesting day. markets holding up. dow up 120. as we mentioned, australian business concern atlassian goes public at the nasdaq. gets set to go public. the company is profitable, has never taken vc fund and is worth $4 billion. a lot of people suspect the ipo today could open the market for some more unicorn tech ipo's. just 17% of tech companies that have gone public this year have been profitable. here we are again, henry, with another litmus test, right? another case study on whether unicorns can do this and do it right. >> this is an easier one. this is a great company that has been making money from the beginning. they have this wonderful enterprise model where it's individual users are distributing the product to each other. there's lock-in what you find is the longer customers in the company. the more they spend, so new customers are driving it. more from old customers. it's profitable. it's a great company.

it's worth something. it's just a question what investors are going to pay. >> john, do you see it as much sunshine being shown on this one? >> yeah. i mean, it's indicating now at, let's see, 26.19 or so. considering that this was expected to price between $19 and $20 a share, $26.16 we see on the screen now, that's impressive, and i think the real question with this one, i mean, it's bootstrap. it just took some money from itself, partners, a little bit. it's bootstrap. it's profitable. the question is can they continue to scale spending as little on sales and marketing as they have? it's kind of the aentd box in that way. a lot of companies have spent a whole lot of money on sales and marketing trying to grow so fast. this one has an entire by different approach. if you are betting on this, then you really think that this because of the nature of the product they sell and the way they figured out to sell it is an entirely new way, a revolution in how customers are going to purchase enterprise software. we're going to dig into that

with the co-ceos when we tuck with them. >> what bob pasani, it has been a lousy year for ipo's. certainly last year has been different than last year. theologic put out a note. it's not been that great of a we're. >> it hasn't, and i think the reason is that we have just made it much too much of a hassle and too expensive to go public. with all the new regulations after the collapse in the 1990s, nabbed that people were very frustrated after that, but we've created this environment now where the only companies that go public are so mature by the time they go public that all -- or a lot of the growth is out of a lot of them. we're trying to derisk them. they go down. >> what about the jobs make this -- a fast track to the public -- >> go back to the 1990s. a lot of risk in these companies. people need to beotology accept that. i think that folks who are buying speculative tech stocks

ought to be able to take that. if i'm going to play in this space, i have to beotology have a lot of these go zero. when amazon went public, it went public at a 500 million market cap. that is just inconceivable now. it's the reason you've gotten 100 after the ipo, and it opened up the market to a lot of folks who can't play now and it's where we have the absurd situation with all these unicorns raising only private money can get in. when they're finally risk-free, or so low risk that anybody -- it's safe for the public market, they go -- >> a lot of them roll over. >> of course not. >> square price below its private valuation. was the lesson of this year that it pays to stay private. >> it pays to stay private for a lot of reasons. i think we need to step back and say, look, maybe we have enacted too much restriction on the public market. i can tell you why businesses would never consider going public. it's incredibly expensive. to do it it's $5 million.

by the way, we are now way bigger than when yahoo went public. few others went public in the 1990s. a lot of those worked out. again, as an investor, it would be nice to be able to place, where he, speculative bets on a lot of these early companies a lot earlier than we can now because now these companies are mature when they go public. >> john, maybe that tide begins to turn if more mark bennioffs say i'm not going to invest in any more unicorns. >> something feels different to me about this today. i mean, this is a company that still has plenty of growth runway ahead of it if you believe in its model. this is an enterprise company. i think expectations in the market overall are sort of dampened. this doesn't feel like a bubblish environment to me. we're talking about a company that sells teamwork software, collaboration software in the enterprise, pricing above the range like that's an exciting

unexpected thing. also, when we're talking about the overall ipo environment not being as hot, the companies haven't performed as well, i mean, wron. 2016 will be interesting given all that. i was just having a hat with enrique salem who used to be the ceo of semantix. is he in the room also waiting for this to open. talking about 2016 and the prospects for private enterprise focused companies. it wasn't a bubblish sort of conversation. i think for investors who are looking for value and for serious and not trendy, there might be possibilities going forward? >> this is a great company. there is a road to continued appreciation. all comes down to price where they're trading multiple of revenue. >> as soon as atlassian starts trading, we'll have a first on tv interview with the co-founders. also in the news, wal-mart entering the mobile payment business. the company says it will start accepting wal-mart pay this

month at stores in its home market in benville, arkansas. rolling out nationwide. wal-mart pay will work through the wal-mart app, and it has 22 million active monthly users. are we all going to have to load -- is this like subscription fatigue as john likes to all it? you got to get every single app. none are bundled. those that don't want to lay in the apple space, for instance? >> that is true -- wal-mart is massive. a lot of people buy everything at wal-mart. if you look at wal-mart's cost, the cost of paying some of the credit card processors a 2% fee on everything they sell, that is a massive amount of money, and i think wal-mart with the payment app here, they're approach it in the right way, which is they're saying go ahead and pay with whatever card you want, but ultimately the opportunity for them is connected to your bank account and it's a 2% fee or more that's just going to be a few basis points. that is a huge amount of money that they can redirect into lower prices, better for

consumers. >> henry, isn't that what apple is doing? it might also be the gateway approximate between payments and credit cards. why are apple and google getting into this if retailers can go at it on their own? >> most retailers can't. they don't have anywhere near wal-mart's scale. apple is now making you do it with a credit card. they're paying the full fee. again, given what actually happens in a credit card transaction, this is automatic transaction, no cost associated with it. the fact that the processors are paid that much is just a huge amount of margin for a lot of retailers. if they can get that back, that's great for them. >> it might be that these retailers specific pay options are the new loyalty card. really the brand wants to have that direct relationship right on down to payment. i think the question is whether wal-mart's late to the party here. starbucks did this earlier before apple pay and samsung pay and android pay, and the rest. can wal-mart pay also get transaction on top of that? of course, they have the possibility to offer coupons, discounts, all sorts of incentives for their core customers to adopt this.

they stand a pretty decent chance, i think. >> although it's best replaced by energy names? netflix had nine nominations for shows like narcos and orange is the new black. compare that to seven. six two years ago. amazon, five noms. transparens. zero in 2013. broadcast tv is nowhere in some of these categories. it's all about either these streaming services or hbo. >> you can think of netflix and amazon prime as the new network model. incredible runway. set up beautifully for the future. some of the carriers are set well. we need access, so we have to pay comcast or verizon or others for access to get this. the current network model, that is what you are going to see

under pressure over the next ten years. >> i guess the only question, though, is how much is it costing them to go out and make these original content, and is it worth the cost, say, for netflix, which doesn't break out the actual numbers and how many people are watching? >> it costs a ton and this has been defense for traditional tv networks. now netflix, amazon, and others have the capital to do it, and they're proving it with what you just cited and with the hours that folks spend watching these networks. twice as many hours in netflix homes are spent on netflix stuff as they are at any other network group. not just network. network group. it's just astounding how much better as a network the new netflix model is. >> it's your own personal opinion. >> the mill enwral consumer of

streaming video. >> netflix and their programming costs where heed. how do we know where the line is where this starts to be too much, too many new pilots, too much spent along with all the shows that are not going to be hits as we know they're not all going to be. we in the business know nobody gets a hit every time. i think that's part of the question here. these awards are great. it's especially impressive for amazon to now be getting a half the noms that netflix had gotten, you know, up from fewer than one-third a year ago, but what this does is help their pipeline. it helps them get a better shot at getting the best talent together to do a project. what happens down the line, whether that translates into the kind of viewership that they need to drive their business, i think that's an open question. part of the reason why they're doing thshg the more traditional content is also doing well. so well it's getting too expensive for them, so we'll see how this all plays out. >> going to be interesting to watch. especially some of the narcos

versus game of thrones now being tossed around in the same conversation. we know what a phenomenon "got" is. thanks for joining us today. sir. >> want to check on markets. still looking at double digit gains on the dow. it's off the highs of the day, but still trading at 107. up 107 i should say. s&p 500 trying to push higher by almost half a percent right now, and the nasdaq as well up .4%. if the gains hold, that could be breaking the losing streak we've been seeing over the last three days. shares of twitter rallying after the company unveiled a new plan to market ads to logged off users. that stock up more than 6%. still down more than 25% for the year, carl. >> when we come back, what to expect from apple next year, including some rumors of a new apple car. to analyst jean muenster will have his outlook for 2016. the hyper loop, one company is ready to test the neck technology, and we're still waiting for the last ipo of the we're.

atlassian over at the nasdaq. a first on cnbc interview with the co-founders as soon as that begins trading. dow up 118. s&p once again flat for the year at 2058. back in a minute. you totaled your brand new car. nobody's hurt, but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do, drive three-quarters of a car? now if you had liberty mutual new car replacement, you'd get your whole car back. i guess they don't want you driving around on three wheels. smart. new car replacement is just one of the features that come standard with a base liberty mutual policy. learn more by calling switch to liberty mutual and you can save up to $509.

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don't settle for u-verse. x1 from xfinity will change the way you experience tv. apple has launched several products and services in 2015 including the apple watch, apple music, but looking to next year the company seems to be tapping into the driverless car space along with partnerships on highend products. for more on what we can expect

in the new year for apple, let's bring in gene muenster from piper jaffray. i read your presentation that you gave to the business insider ignition krchgs on predictions for next year. i think we should start with i phones because that is the main driver of the stock and of apple's corporate profits. one 2015 story was that it managed to gain global market share. do you see that potential in 2016? particularly in the u.s., such a saturated market. >> yes. i think they're going to grow slightly in the u.s. if you look at the teen survey we do a couple of times a year it shows the intent to buy from teens from 72% so their next phone will be an iphone to 74%. what that means is you put all the numbers together. as you can see a small maybe 29 basis point. you will see the market share story gaining in 2016, and importantly because of this iphone is a subscription, which is something that doesn't sound very exciting at the surface, but if you dig into it, this

could have a measurable multi-year positive bakt on apple. >> how apple as a subscription business will be a real mover in terms of sales. >> it started in october this year, and ultimately you have four carrier that is have filed suit when you buy a phone in the u.s. you don't pay anything additional, but you get the luxury of upgrading every year. the way that the math is possible, they're streamlining the residual value of the iphone, and what that means is if you see a few months decline and the time between people wrup grading iphones, it have a measurable impact, and so for example in the u.s. the annual wrup grade cycle is 22 months. in f that goes to 15 months over the next four years, that can add a few percent of growth a year. apple announced they're going to rule this out internationally. that's going to be one of the themes this puts out internationally, and ultimately i think that's going to have a positive impact on apple's multiple. >> gene, people are wondering

whether alof this is being strategically from a position of strength or weakness, whether they're pushing these things because they're worried about sales or are they just wanting to goose existing levels. how do you read that? >> well, they're worried about the law of large numbers, which is what investors are worried about too. when you have a $240 billion company, how do you actually grow that, and the way you grow it is you look at trying to accelerate sales within that. this is a huge lever to try to compress the upgrade cycle. in some respects they're not worried about competition, but they, line anybody, wants the stock that's going to go up. one of the ways to get that is to get some visibility with the revenue growth. >> so, gene, in 2015 we saw the launch of the watch, apple pay, apple music, a new tv. none of these products, though, are really contributing meaningfully to revenue growth rsh none of them have become must have products that we can tell yet. how -- do you expect that to change next year? >> i think it's going to be some

of the same themes. if you look at 2015 the revenue growth jumped from 7% in 2015 to almost -- 14 to almost 30% in 2015. even though there wasn't a lot of excitement in the products you announced, they still had a big impact, and the biggest reason is the larger screen phone. as far as 2016 is concerned, look for a larger iphone. iphone 7. they can remove that home button. still do some of the biometrics through things like ultrasound, but i think also there's this chance that they do a smaller phone, a four inch phone which would be the same size as the 5 its s today. sounds ironic we've been talking about larger factor phones. i think the combination of those two along with the subscription service and you get some things -- some new things on apple pay setting 2016 up to be a good year for apple. >> what do you know about product titan? a lot of interest in this. when can you start factoring it into the actual estimate for appear and into revenue estimates? >> it's 2020 or beyond the "wall

street journal" that the car will be available in 2019. it's going to be -- we're talking about five years away, but to put it into perspective, if apple replicates the success of bmw, which some think is conservative and others think is crazy, that's 1.8 million cars, and that would add about $135 billion to apple's overall revenue, which would increase the revenue by about 35%. to answer your question, when can you start factoring this in? it's probably a couple of years away. apple is going to transfer -- try to tans transform a 100-year-old industry that hasn't changed much, and i think automotive is definitely one of those areas. >> finally, gene, really quickly, some of your competitors on the sell side have some ideas about companies apple might buy next year. big ones. go pro and tesla on the list. do you look at that and laugh? >> i thought they pretty much had every company under the sun on that list. i think tesla is the one that makes the most sense for all the stuff we just talked about. >> gene, thank you very much.

that's making news today as well. gene munster, appreciate it. >> interesting call. a deep dive on your jeans. meg terrell will have her entire genome sequenced and will tell us what that was like. we're waiting for it is last ipo of the we're to open at the nasdaq. we have a first on cnbc interview with the ceo and co-founders as soon as it opens. squawk alley back in a moment. surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is?

>> unlocking your genome. our own meg terrell went through the entire process, and she's here at post nine to tell us just what it was like. >> so i've been told throughout this entire thing that i am on sort of the frontlines of medicine here because very few people who are healthy have their genome sequences read out. this is interesting for me to think do i want to know, what will i learn that's useful, and all these questions are spelling out some interesting futures for this business of genome sequencing. this is actually a pretty big

area, and it's growing very, very quickly. it's about $2 billion annually already, and it's growing at a rate of 20% a year. some of the major players here are probably companies most people haven't really heard of, but some people question if this is getting so big, that these could be sort of the apples of the future. particularly that's applied to companies like illumina. there's others like thermofisher, a major competitor last we're for $13 billion. roche is also in this. they make sequencing equipment, and then there's smaller company pacific biosciences and a bunch of others that are also competing in this space. what's really interesting is it's not totally clear how useful it is to get your genome sequenced if are you healthy. if you are sick, it makes a lot more sense, but some of the barriers to adopting this so far will you things like cost and whether it's going to get reimbursed, fda clarity. that hurt -- just the proof of how useful this is. we sat down with illumina ceo

and he says the costs could go further down more than we've already seen. it's gone down to $1,400 now, and he thinks it could go below $500. take a listen to what he said. >> what we have is to begin to actually create the health economic evidence that shows that if you can manage your health through use of your genome, that you can have better outcomes, number one. you can reduce the overall cost of the health care system. if we can begin to show that, i think it will create a dramatic acceleration in the rate people get sequenced. >> it's all about showing more proof right now whether it's going to lower costs for the health care system overall. illumina spells out a $23 billion market for skweensing. it's completely untapped. this is going to get bigger and bigger. we're going to have more results from my own genome sequencing later. >> dumb questions. it's a swab, i assume. is it's that simple? >> so this one is blood, actually, and then 23 and me is

a spit test. >> you are going to be given answers to things like, for instance, categories? what, you are susceptible to x, y, z? >> things i'm susceptible to, things my kids could be susceptible to and how i might respond to different drugs. >> do i need to do this? >> that's a great question. it's a very personal decision for whole genome sequencing right. think maybe the swrir is out on whether it's important for health where i people for 23 and me that's a lot less expensive. it's about $200. that's something you could do for fun. >> you expense this, i assume? >> i should. >> all expenses. >> in the name of the story. >> meg terrell. >> france and germany going to try to close with us and green arrows, simon. >> do you remember on friday that wall street rallied and mario draghi did that dovish speech here in new york suggesting after they disappointed on qe maybe they do more moving forward for the second day in a row the member of the ecb is writing it on the wall for everybody, not to bank on draghi being able to deliver.

this comes from eve m irs ch, who is one of the top six. the very large majority of the governing council is of the view that the measures are appropriate and that more is not needed to reach our goal. as far as the markets are concerned, what was completely underestimated was the fact that we are a elective decisionmaking body. you need to be more cautious on what draghi is saying in public. that is the message from his colleagues. the upper echelons of the ecb. let's get to the individual stocks. glencore is a clear winner after today they have their capital markets day and increase their debt reduction plan to $13 billion after a lot of losses. you can see it's piped some 7%, and what was interesting, of course, was the short covering you had across the board yesterday. in that sector particularly on anglo in anticipation of that. one of the main losers today is old mutual, the insurer that gets about almost half of its income from south africa. in casure not aware, the south african president zab zuma has

sacked his finance minister. the country is going further towards junk status. bonds are crashing. the south african rand is crashing. it's showing up in the stock down 10%. the other one that's interesting is s wr ngenta. remember it abandoned its attempt to take over. see how it's continuing to rise. up almost 4%. off its highs, but still high. there is a view that if you do get the dupont dow deal being announced later in the week, it will embolden everybody else in the industry to look again at what they should be taking over and dare we suggest monday santo might return with another offer. guys, back to you. >> all right. simon, thank you very much. when we come back here, we're still waiting on the fist trade of atlassian. marking the final ipo for 2015. the company's co-founders will join us for a first on cnbc interview as soon as it starts to trade. dow is up 120. we're back after a break.

gop presidential candidate donald trump has canceled his planned trip to israel, following his comment that the u.s. should stop muslims from entering the country. israeli lawmakers called on prime minister netanyahu to cancel. trump tweeted he would reschedule after he becomes president. lawyers hired to compensate victims of general motors faulty ignition swimpz have paid out

$595 million to settle 399 claims. the final report from kenneth feinberg who headed the funds. on-line retailer wroefr stock.com stopped selling hover boards citing growing safety concerns. a number of airlines, including british airways are starting to ban the hover board on fears they pose a fire hazard on flights. they have powered by lithium batteries. madon wra staged an imprompt your concert in paris plaza to honor victims of the attacks. fans rushed to the square after the singer tweeted that she was singing some songs in the plaza and to meet her there. that's our cnbc news update at this hour. let's get back to squawk alley. >> got breaking news here. atlassian is open for trade over at the nasdaq. price, of course, above the range of $21. looking at about a 30% gain to $27 and change. we do have a first on cnbc interview with the co-founders in just a few minutes. that will bring to a close a

crazy year for ipo's in general. >> or a lousy year for ipo's overall when you look at how many have been pulled and how they've been trading. at least ending 2015 on a high note. you wonder if it opens the flood gates for any other so-called unicorns that are looking to go public in 2016. >> that's going to be a big question for next year. in the meantime, yahoo and marissa mayer laying out a new strategy for wrau hue yesterday, as you know. basically vowing to spin out the core business instead of spinning out the alibaba stake. here she is talking about the board and the management team. >> it was a unanimous decision at the board level. yes. i absolutely agree with the board, and we remain really aligned with both the board and management here that this is the best path forward for the company. >> but now a new controversy is brewing over her compensation if there is, in fact, a hang in control. our mary thompson is back at hq with more on that. good morning, mary. >> hey there, carl.

in response to reports that mayer could leave with $150 million if yahoo gets sold, a group took a closer look atta hue's proxy. it found that the $150 million plus payday was based on where yahoo's stock price was last year. now, since then, of course, it's tumbled over 30%, and this decline is reflected in the smaller pay-out mayer would receive if there was a change of control today. largely because stock and option grants in these situations would be worth far less. in a blog post it lays out what mayer would receive. cash stock invested opings worth -- that's a big sum by any measure, but almost $100 million less than when the proxy was filed. still, if there was a change of control today, equilar says it would be the tenth largest cic payout over the last ten years among firms with over $5 billion in revenue. equilar also points out her change in control payout decreases each year. she was given a big grant when she was hired. it vests over five years, and

the stocks and options divest each year. that shrinks the payment. if she didn't have that grant, the pay swrout would be $21.6 million. if she is terminated, let's take a look at what she would receive then. it's less than half. the number is estimated to be $23 million. still, not a bad payday. back to you. >> thank you very much, mary. that is going to be a talker for a while. our mary thompson. let's get over to the cme this morning and check in with rick at the santelli exchange. rick. >> well, good morning, carl. you know, there's a lot of talk as many in the traders i deal with and sources are trying to get ready for what the fed will do next week. i call it the great recalibration. no matter how it turns out, though, the one issue that keeps coming up is collateral, and collateral in the form of things like high quality collateral. treasuries, boons. there is a shortage of high walt collateral. there isn't really a shortage of the paper itself. there's not really a shortage of t-bills or boons.

it's a lot like diamonds. anybody who has really studied diamonds, are they really a rare stone? the russians have caverns filled with them, debeers, they have human unkus inventories, but they're still very expensive and considered rare. why? because what's in the caves, the caverns and warehouses isn't what you get to buy? they trickle some out, and that trickle out amount keeps everything priced at a certain level. it's a lot like what's happened to high quality collateral. the biggest owner of treasuries is now the fed, and they're on the balance sheet. white diamonds, what we have to choose from isn't a lot, but there's a lot out there, and the great recalibration might unleash a lot of this back into

the marketplace. it's a lot like the titanic. now on a much lighter note, of course, happy hanukkah to those out there, and i went and bought a christmas tree yesterday, and my wife says how many lights do we put on it, and i have to thank the university of sheffield in the u.k. they have formulas for this stuff. in terms of light, all you do is you take pie, which is 3.14 times the height in centimeters and eight foot tree. the number that ends up popping out is 763 lights. it comes out to 50 ornaments. everything can be done in a fashion. thank you university of

sheffield. back to you. >> rick santelli. shares of atlassian trading on the nasdaq. they're up more than 30% here in the opening action. stocks soaring even after the company priced above its expected range. both co-founders of the company will be joining us in a first on cnbc interview in just a moment.

♪ i finally did it! ew. let sparkle paper towels clean it up. it's perfect for cleaning spills... ...desktops... ...and chalkboards. too clean? sparkle. because it's a messy world out there. >> coming up, despite crude

hitting new lows, one money manager says it's time to jump into that sector. he will make his case. should apple be shopping for a deal this holiday season? someone says yes, and is naming names. and the number one airline analyst on the street on why the sector is ready to take off once again. now to john at the nasdaq. we'll see you in about 15. >> soupdz good. thanks. a big test of the ipo market here at the nasdaq. last ipo of 2015. atlassian open for trading. above the range of $1 2 1 a share. soaring up 30%. joining us now on the trading debut. the co-founders and co-ceos of atlassian. congratulations. first off, why now? an ipo has been rumored for you guys for probably about three years. you've been profitable since the start, and right when everybody is getting down in the dumps about the state of the ipo market. you come out in december. why now? >> well, look, we've already always tried to build a long-term business. we haven't been able to time the markets. we did it when the company is

ready. culturally and process-wise. and we're ready. we're excited to go do this and. it's a huge validation of all the work we've done at this point. >> how confident are you that the amount that you are able to spend on sales and marketing, the small amount relative to the rest pretty much of the enterprise software business is sustainable relative to the skaul that you want to achieve. i know people have been telling you for a long time, hey, if you want to get any big are, you'll have to spend more on sales and marketing. you continue to grow despite that. is there a plan b if you do hit a wall? >> let me think about it. old school if you wanted to sell books, you would hire someone in a bookstore that could recommend you books and help sell them to you. with the internet and with the scale and distribution you can get on-line, it makes no sense to have an individual salesperson servicing every customer. it makes way more sense to put the investment dollars into building an automated engine to help serve your customers, and that's what we've done. if you look at what we've achieved, we've got 50 thois,000 companies using our products. over 160 countries.

there's no way we could achieve that level of scale with the old model of putting a salesperson in every location. >> how did you two make it work because your co-founders, co-ceos, the record is mix odd how the partnerships turn out long-term. not trying to jinx anything, but how do you manage without one being the president, the other being the ceo kind of a chairman ceo role. is that last sng are you mad at each other? you're probably happy today. how has it been working? >> we've got a lot of experience in doing this. we've been doing this for 13 years. we've made it work really well. i think it's a huge strengths for the business. we have double the ceo band width of some is companies, and, you know, we've made it work. we've both done every swrob in the business over the wreerz. we've both grown up in the business. very similar to our situations. it's awesome. he can do everything well or better than i can and so it's just amazing to have that band width and firepower. >> you're not going to counter and say no, he does it better?

>> he does everything -- he does everything, and i take all the credit. that's how it works. >> a lot of people still feel like you fwot to be in sell convalley. you did if in australia. you technically moved the head waters to london, but still, a lot of people feel like this is an australian company. do you need to grow in the u.s. going forward? do companies largely need to start there? are you an exception to the rule, or have things changed? >> i think starting in australia, we've taken a different perspective on events and built a unique company as a result of being outside of the silicon valley eco chamber. i think in australia we take a long-term view of things, and it's been a strategic advantage of us. we're the number one place to work in all of australia, so we have incredible talent there. we're the number two place to work in all the united states for small and midsize companies, so we're able to track amazing talent here as well. it actually does affect the way you build a company. you really need to do it

long-term if you are outside of the silicon valley mindset. >> why did you bootstrap? $10,000 on credit cards to get started. i'm sure profit after a couple of years. there were people willing to throw money at you. a lot of companies now, private companies, are saying we'll just take money to stockpile it for a rainy day. you didn't do that. why? >> think of when we started in 2002 in the depths of the dot comboom. nuclear winter for tech. nobody would have given two knucklehead from sydney any dollars anyway, so we didn't go and look. to be honest, we built this amazing disruptive business model that we have. just focused on building great products each year and improving them on a constant basis. really listening to the customers in a really, really deep way. it started working. once it started working, you had people coming and saying, well, we were profitable. why should we take that? what's the difference. >> we're just about out of time. each has three kids. how do you manage it all?

>> one of the company values is built with balance, and i think it's a big sort of testament you can build a great company and have incredible family as well. i think work is only one-half of my life. a different vibe on ipo. congratulations, scott and mike. thank you for joining us. we'll continue to follow your progress as a public company. guys, back to you. >> john, thank you very much. john fort over at the nasdaq. when we come back, the hyperloop could be coming a lot sooner than you think. we'll talk to one company hoping to have a test track up and running as soon as next month. they'll tell us how in just a moment.

my name is kieran griffin. i work here at five star auto care in rocklin california. a lot of thought was put into the change to solar and we couldn't have done it without pg&e. pg&e is very committed to clean energy. working with five star auto care we looked at how we could make their business more energy efficient

and save them money in the long run. with solar we have saved about 85% on our energy cost. with this extreme drought we're using the savings from our solar system to save every last drop of water. if you are looking for ways to save energy, your first step is to call pg&e. together, we're building a better california. >> 30 minutes to san francisco from l.a. we'll be on track after hyperloop bought 50achers of land near las vegas to test its propulsion system. it's expected to be ready by the first quarter of 2016. with us fa l.a. this morning is rob laurie, the ceo of hyperloop technologies. it's great to have you back. good morning. >> good morning. it's nice to be back. the story would suggest that this is like almost done. how far along are you? sfroo this is a very important milestone, carl, on a swrurny of many milestones. what we'll be testing is starting in the first quarter is

the lynn wrar electric motor, which will give us the energy to move the pod very quickly. we're moving this particular sled. it will be constructed to 540 kilometers in two seconds. now, that's not the kind of ride that you and i are going to take when we're on the hyperloop. >> thank goodness. >> we'll be doing that up over a much larger -- over a much longer distance. this is a very important milestone for us. then as we look forward into the full year, we'll be building the full system including this propulsion system, including the livetation technology, including the tube itself and the way in which we construct that and insure that the low pressure environment is maintain and will be demonstrating that full system by the end of 2016, and we call that our kitty hawk moment. >> rob, i'm wondering who is paying for all of this. how much government subsidies are you getting? how much is being funded by private investors?

>> there's absolutely no government money involved in this at all, and i would like to tell you that the support we've had from the state of nevada we first were introduced by senator harry reid when our co-founders met him in september, discussing this really amazing whered of hyperloop. then we had tremendous support from the governor's office, governor sandoval, the department of economic development, the mayor of north las vegas, but there's no government money. what we really got was speak. we got a tremendous amount of support. people moved questionabling. hyperloop will be fast, but we need governments and regulate ors and municipalities in states to move just as fast so we can see this become a commercial reality. fast he than anybody might imagine today.

>> right now we are the leader in this endeavor. we're raising capital as we speak in october we close 27 million dollars. collars 26 million, sorry, on our way to the $80 million series that we talked about when we last chatted. we expect that to close this month, and we're working hard on that as we speak. as we look forward, we'll be raising more money. we'll be partnering around the world with projects. as we actually work hard to not only deliver the system and demonstrate its capabilities in 2016, but puck those top three projects around the world that we think are going to really, really demonstrate the transformational capabilities of hyperloop, moving freight, and moving people. >> do you worry, though, that the race to do it first or do it biggest puts, wron -- i mean, you know the we. it puts safety at risk in some form or fashion?

right now we are attracting talent. we've had 16,000 applications from some of the smartest people. we've doubled the size of the team since we last spoke. we have 75 people today on board. as we begin to demonstrate how powerful and transformational hyperloop can be, how it will change cities and how it would change how you think about living and how it will change how ow supply chains. we're going to be first and fast, and we'll look for places that will support us in moving as quickly as we would like to move. maybe we'll come out and visit you in the next few months. good to see you again. >> we would love to have you come and visit. good to see you, carl. >> when it's safe.

>> up next, the top app of 2015 according to apple. we'll bring in to you live in just a moment.

we have new information for you on a developing story. warren buffett's new lie

revealed 8% stake in a real estate investment trust that holds several several hundred sears and k-mart stores that's controlled by sears chief eddie lamb period of time. buffett telling cnbc he is making a real estate play here. he believes that "there is value far beyond what they're getting from sears." stores are vacated by sears and buffett says the rent can get much larger, larger rents from new tenants. he tells us that he has not spoken to eddie lampert. buffett's view, "reets work out better for personal investors." shares of srg are sharply higher. here now up more than 15%. live streaming and sharing with it with krir followers.

the app is downloaded more than 10 million times. winners of the apple of the year title were -- the language app dual lingo in 2013. it came on the show several times. and jack dorsey. they're owned by twitter. ask at what point do you monotize. i think that's some ways off. starting to get some scale. you whon does a lot of it? cramer before "mad money". it's seen ridiculous growth. >> a lot of people use it. a lot of people watch it. the problem also, i think, is competition, right? facebook is rolling out this new live video feature. there are others. nothing proprietary, but still, a boost of confidence, i would think. apple also named drake best artist. >> yes. >> by the way, as you look at twitter stock, that's a 7% gain on twitter. that's the 17th best session they've had on a percentage basis, and the other bit of news on twitter is that they are going to start rolling out ads

for logged off users. if you go on twitter but don't actually logged on, you might still be seeing ads, and we'll see what that does for monotization going on. let's get back to scott whop ner who is over at headquarters with the half. >> welcome to the halftime show. joe terranova here along with josh brown and john and pete, and also with us on set today is jon in an. is he the ceo of hurtle callahan. a firm that has $25 billion in assets under management. big bite for apple. one man on the street says the company should be shopping for a big gift this holiday season.